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As enacted
Contents

Part XIII

385. Order of priority where fi xed security receiver appointed

Official English translation. Where it differs from the Sinhala or Tamil text, the Act itself says which text prevails.

(1)

This section shall apply to a receiver who was appointed by virtue of a fixed security.

(2)

In this section, “applicable fixed security” means the security by virtue of which the receiver was appointed.

(3)

Subject to sections 234 and 331 and to the rights of the persons referred to in subsection (4), a receiver to whom this section applies shall apply the proceeds of realisation of the property in receivership in or towards satisfaction of the debt, determined as at the relevant date, secured by the applicable fixed security.

(4)

The following persons shall be entitled to distributions of the proceeds of realisation of the property in receivership in priority to the grantee of the applicable fixed security, and in the order of priority in which they are listed –

(a)

first, if the company is in liquidation, the liquidator, for any costs reasonably incurred by the liquidator in preserving and realising the property in receivership;

Rescue, Rehabilitation and Insolvency

(b)

second, the receiver, for the costs, charges and expenses properly incurred by and the remuneration of the receiver under this Act; and

(c)

third, the grantee of any fixed security over any part of the property that ranks prior to –

(i)

the applicable fixed security; and

(ii)

any floating charge, for any debt owing to that grantee, determined as at the relevant date; and

(d)

where the applicable fixed security ranks below a floating charge over any part of the property under subsection (2) of section 431 of the

Companies Act, and without affecting or limiting paragraphs (a), (b) and (c) of this subsection –

(i)

fourth, the persons having preferential claims, in or towards satisfaction of their claims, determined as at the relevant date, set out in paragraphs 1, 2 and 8 of the Fourth

Schedule, to the extent and in the order of priority specified in that Schedule, except such costs, charges and expenses as are referred to in paragraphs (a) and (b) of this subsection;

(ii)

fifth, the grantee of the floating charge, for any debt owing to that grantee, determined as at the relevant date; and

(iii)

sixth, the grantee of any fixed security over any part of the property that ranks prior to the applicable fixed security but below the floating charge under subsection (2) of section 431 of the Companies Act, for any debt owing to that grantee, determined as at the relevant date.

Rescue, Rehabilitation and Insolvency

(5)

After the debt secured by the applicable fixed security has been satisfied in full, any further distribution of the proceeds of realisation of the property in receivership shall be made to the company or, if the company is in liquidation, to the liquidator.

Read on from s 386

Part XIV

Cross - Border Insolvency

Read on from Part XIV

Part XV

Read on from Part XV

Part XVI

Read on from Part XVI

Part XVII

Read on from Part XVII

Schedules